You are not your brother’s keeper. Nor are you your sister’s keeper. But if you have a spouse and you file a joint income tax return, the IRS will hold you jointly responsible for any obligations that may exist.
If a married couple in Minnesota faces liabilities for underpaid taxes or unreported income, interest and penalties, they share the burden of making good on the bill together. Even if they are no longer together, the burden does not necessarily go away. Obtaining tax liability relief in such a situation may be possible, but qualifying requires meeting certain conditions and experienced legal counsel can be invaluable.
This loophole in the tax code is called Innocent Spouse Relief. This is how it works.
Say you are one of the many couples who opt to take advantage of the particular benefits that come with filing a joint return. Both parties have to sign the return and the presumption on the IRS end of things is that both parties are equally responsible for what that return reports. However, it’s not unusual for one filer to do all the paperwork and for the other to just sign off on the final product. Years later, even if the couple divorces, the IRS can come collecting and both parties remain liable.
Eligibility for innocent spouse relief requires the following from the filer:
- An acknowledgment that errors on a return led to an understatement of taxes due
- Clear evidence that you didn’t know or have reason to know about the mistake
- A statement explaining why, considering the above facts, it would be unfair for you to be held liable
Be aware, if the IRS suspects fraud of some kind, such as an improper property transfer between you and your spouse (or ex-spouse), innocent spouse relief won’t be available. Consult an attorney to be sure you understand what your options and your rights are.